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Significant role for SA in Nissan’s new global strategy

Set to be the hub for SUVs and light commercial vehicles across Africa, the Middle East and India.
An acceleration of localisation is expected to accompany the planned increase in domestic and export production. Image: Moneyweb

South Africa has a significant role to play in Nissan Motor Company of Japan’s new strategy, including increasing the number of destinations to which the new Navara pickup is exported from Nissan South Africa’s manufacturing plant in Rosslyn in Pretoria.

Nissan Motor Company in May this year unveiled its new global four-year transformation plan to achieve sustainable growth, financial stability and profitability.

However, it was silent on its future strategy for Africa, including its Rosslyn plant, until Monday when it announced its four-year business plan for the Africa, Middle East and India (AMI) region.

This followed Nissan in April last year announcing a R3 billion investment in its Rosslyn plant to prepare the facility for the production of the next generation Navara.

Shinkichi Izumi, managing director South Africa, said on Monday manufacturing is important to Nissan’s strategy and the intention is for South Africa to become a special utility vehicle (SUV) and light commercial vehicle hub for the region.

Izumi said they will be increasing domestic and export volumes from South Africa.

As a consequence, there will be a greater focus on cost efficiency and an acceleration of localisation driven by the locally produced Navara, while skills development of people will be a key strategy, he said.

Seven new models

Izumi added that Nissan is planning to introduce and launch seven new models into South Africa and sub-Saharan countries in the next two years.

However, he said that aligned to Nissan’s global strategy, the product portfolio will be streamlined to focus on two areas and result in the expansion of Nissan’s SUV and crossover offerings and the further strengthening of its solid light commercial vehicle base with the new locally produced Navara.

Izumi added that apart from Nissan’s mother plant in South Africa, it also has a semi-knocked-down (SKD) assembly plant in Nigeria with its local partner, the Stallion Group.

Read: VW, Nissan chase an African market where car loans are rare

“We are now looking for and studying further opportunities in Ghana and Kenya and are working closely with the African Association of Automotive Manufacturers on this,” he said.

Mike Whitfield, former Nissan South Africa and sub-Saharan Africa MD and now chair of Nissan Africa South and MD of Nissan Egypt, said the Africa Free Trade Agreement has been postponed by a year because of Covid-19 but automotive is a key section of the agreement.

Whitfield said there are only two auto manufacturing bases in Africa – in Morocco and South Africa – which means there is a big opportunity once the Africa Free Trade Agreement and the automotive aspect of it is concluded.

“This is definitely [a] work in progress,” he said.

‘Enormous potential’  in Africa

Guillaume Cartier, chairman of the AMI region for Nissan, said the region has enormous potential with some of the most dynamic and diverse automotive markets in the world.

“Nissan has already established a strong foundation for sustained growth with high brand equity, a deeply embedded heritage of Nissan DNA and culture and a long history of dedicated and experienced business partners in retail and manufacturing,” he said.

Cartier said AMI will follow the global transformation strategy announced in May by Nissan chief executive Makoto Uchida, which aims to achieve sustainable growth, financial stability and profitability by the end of fiscal-year 2023.

But Cartier said they wanted to achieve a higher market share in the region than for Nissan globally and also achieve an operating profit higher than 6% by 2023 in the AMI region.

“This is key to make sure we can reinvest in the future,” he said.

Read: Renault and Nissan rule out merger

Cartier said the AMI region is full of opportunities for significant growth because it is huge and comprises many countries, has a huge and young population, and in many countries vehicle ownership is low.

“That is something that we take as an opportunity and we need to transform into business.

“Over the next four years we will transform opportunity to reality by bringing the right products, services and technologies to deliver lasting positive change for the business, our partners and customers,” he said.

The Automotive Industry Development Centre (AIDC) said last month the expansion of South Africa’s automotive industry is central to the government’s economic development strategy but the Covid-19 crisis has forced car makers into survival mode and “could push ambitious growth plans out of reach”.

The AIDC is expecting a 20-30% decline in vehicle sales this year, with AIDC CEO Lance Schultz anticipating that it will take between two and five years for the industry to return to normal.

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In very many countries in the world the incentives are around electric vehicles to reduce air pollution. Or as the Chinese refer to it new energy vehicles.

And we are doing what……spending valuable capital on standard ICE vehicles. Where is the Nissan leaf and the Nissan electric van (be a great taxi)

For export maybe but not for sale here. Can you imagine Eskom trying to supply electricity to charge vehicles, can you imagine the number of ‘illegal connections” from any charge station. Can you imagine the battery theft. Unfortunately Africa is not the place for electric cars for a very long time.

Kevjones:

Urban Taxis would be a great electric vehicle application (intercity less so due to recharge times). EV are especially more efficient at city stop start than high speed open road. Mine does 12kWh/100km within city and 18kWh open road.

Let’s say an urban taxi does 250km a day. In city in larger and heavier than my body let’s assume it achieves 20kWh/100km. So for 250km recharge = 50kWh per day and that needs under 3hr on a three phase charger that peaks about 30kW. Since this would mostly be afterhours charging (and can programmatically be excluded from peak hours), it would suit Eskom to have 6GW of offpeak demand in terms of utilization and average costing. 6GW is 200,000 taxis or probably more than the whole urban fleet.

Cost? Running cost of 50kWh is let’s say 60c or R30 per day at Eskom offpeak rates. That is under 15c/km compared to 15l/100km or R2.25/km in petrol.

The main hurdle is not energy cost or grid capacity.

If you read up how the recharge works and how the batteries work you will understand that battery theft is NOT a risk. Very high voltage and very large system integrated to the vehicle build, not removable with a few spanners. Similarly the recharge is very high voltage and current. If somebody is going to steal power it is will be on the normal Eskom input side not the charger output side, so no different risk than any other electricity connection in the country.

The biggest hurdle is EV cost.

The biggest government problem is the loss in RAF and road taxes that it levies on petrol….

You are so right. I have pressed Nissan several times about the LEAF to no avail. S. Africa is being left behind as the whole world begins a huge transition to EVs. This is the biggest development in personal transport since the horse and buggy was replaced by the automobile and we are being passed by because a) either S. Africans are too complacent and stuck in their ways or b) our market is too small. As far as the latter goes I find that a bit hard to believe, just seeing the extremely expensive cars that are driven around JHB’s northern suburbs.

These people could easily afford an EV, which are always touted as being ‘too expensive’. The whole issue around electricity supply is nonsense. It would take EVs years to make any significant impact on the power supply and at least those who would use a charging station, or instal one in their home, would actually pay for their power so I doubt Eskom would complain. The issue in this country is people using power and not paying for it.

On the positive side, there are charging stations starting to appear around JHB, so some people clearly have vision.

Recent safety tests gave Nissan a very low to zero rating . This needs attention as Africa has a high road accident rating. Duty free in Africa? I doubt if this will ever happen. Kenya purchases Toyota directly from Japan and the duty is complexed due to other “trade agreements ” on minerals etc ..like Bata Trading .

Would not even produce chocolate yo-yoys in Nigeria

Worst vehicles I have ever bought for my company. Never again.
Sticking to Toyota, Isuzu, MAN and Mercedesand Ford now.

Go onto Youtube and search for Scotty Kilmer Nissan. He is American based but shares your views on Nissan. He does not do many programmes on bakkies but he does talk about the Xtrail, which is named the Rogue in America. He considers it aptly named.

Nissan skyline 2.8 gtx was a great car.

At the moment only Nissan sells new half ton bakkies.There might be a new gap in the market for a competitor.Opel Corsa 1.7d non turbo half ton was the best ever.

Do we at least get the new NP300 and not the 20 year old version?

I bought one and traded it in on a Toyota after 6 months.
Huge loss and huge disappointment. Biggest crap ever. Buy an Isuzu diesel with 250 000km on it (R50 000- R90 000)- it will give you at least double that, with regular servicing at your local backyard mechanic. (better and more honest option than the dealer. Also half price on dealer prices)

End of comments.

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